Below is the text of the speech made by John Swinney, the then Scottish Finance Minister, to the SNP Spring Conference on 24th March 2013.
Conference, this has been a momentous week.
Almost 80 years after our party was formed; 14 years after the Scottish Parliament was created; six years after this party entered government – our aim of self-government took another massive step forward.
Let me start with a truth that we have all patiently put forward for decades, a truth that will play a fundamental part in the decision made by the people of Scotland on September 18th 2014:
“By international standards Scotland is a wealthy and productive country. There is no doubt that Scotland has the potential to be a successful independent nation.”
That is a quote from a group of dispassionate and impartial economic experts who form the Fiscal Commission established by the First Minister. These independent onlookers have conducted one of the most thorough analysis of Scotland’s economy that has ever been undertaken. We know that quote to be true. Our job is to make sure our people share the confidence we have in Scotland.
Scotland has strong foundations, perhaps some of the strongest from which any country has sought its independence. Our opponents will try to undermine the self-confidence of our people. We must never let that happen.
This Spring Conference is not only timely because of the announcement of the referendum date on Thursday. It is timely because Wednesday’s budget confirmed the choice between two futures that the people of Scotland will face.
The choice is between a UK system that, in the Budget short-changed Scotland, with a last minute cut to the finances Parliament has already allocated, locking us further into a no-growth austerity agenda; or, the prospect of taking into our own hands the vital decisions to stimulate our economy.
In these last days of the union, we have seen the gulf that exists between our ambition for Scotland and the poverty of Westminster’s policies.
We want to transform the life chances of our people. The No campaign want to keep our people in their place.
In all the debate about Scotland’s financial future, one point is very clear: the real risk to Scotland comes from staying part of the United Kingdom. By any measure, the Chancellor’s plan isn’t working.
The Chancellor tells us he can’t borrow to invest. Yet he is going to borrow £244 billion more than he planned to borrow just to deal with economic failure.
Sustainable public finances require a growing economy. That is not on offer from the UK – not now, not any time soon.
The UK growth forecast for 2013 started off at 2.9%. Now it is only 0.6%.
This is a damning judgement of the UK Government’s record on the economy.
Conference, the Chancellor needed to deliver a Budget to kick start the economy.
Instead, the Chancellor and the Scotland Office spent Wednesday afternoon claiming that they had given Scotland extra money, only for the cheque to bounce within a matter of hours. They’ve cut our budget by £100m, and replaced it with loans that we have to pay back.
In eight days’ time, Scotland’s spending plans – democratically agreed by our own Parliament – will be cut as a result of George Osborne’s decisions.
Scotland needs investment—not cuts. That is the price of being part of the United Kingdom.
And to make matters worse, the combined effect of the Chancellor’s cuts will deliver a hammer blow to some of the most vulnerable in our country.
Working tax credits – cut.
Housing benefit – cut.
Child benefit – cut.
Child tax credits—cut.
Council tax benefit—cut.
Disability living allowance—cut.
Employment and support allowance—cut.
Child trust funds—cut.
And unsurprisingly VAT and employee national insurance contributions—up.
And the NO campaign believe this is an example of their excellent stewardship of the UK economy.
The tragedy of this week’s budget is not simply the misguided policies of this Tory Government. It is the missed opportunity for Scotland.
The contrast with the record of the SNP government could not be clearer.
For six years, we have delivered careful management of the public finances.
We have balanced the Budget.
We have lived within our means. But we have also restored free education, abolished prescription charges, safeguarded the NHS, secured pensioners’ bus passes. And, for the sixth year in a row, we have frozen the Council Tax.
That is a triple-A record at a time when the UK has lost its triple-A rating.
But Conference, it has not been without its challenges.
Along with our local government partners, we’ve plugged Westminster’s £40million cut to the Council Tax Benefit budget for next year.
We’ve set up a £33 million Scottish Welfare Fund to administer Community Care Grants and Crisis Grants, reinstating £9 million of funding cut by Westminster in recent years to financially support an extra 100,000 vulnerable Scots.
We’ve given £5.4 million to benefits advice groups to help them cope with the increasing demand for help from hard-hit families as a result of Westminster’s cuts.
And as the First Minister announced yesterday all SNP-led local authorities will follow the lead of Dundee in halting the threat of evictions from this disgraceful tax for those struggling to pay.
We have not stood by while Westminster cuts fall hardest on our poorest.
But to the people of Scotland I say, in all honesty, we cannot, within our limited powers and resources, fix every Westminster cut. To create a fair and prosperous society we need the powers of independence.
Conference, the foundations for Independence are clear.
Scotland is wealthy, in numbers and in our people.
With our geographical share of oil, Scotland would be ranked 8th out of the 34 OECD member countries. We are a rich country.
Five of the seven countries that rank above Scotland are small independent nations.
We are better off than the rest of the UK.
Our population makes up 8.4% of these Islands. Last year we contributed 9.9% in revenues to the UK and got 9.3% in return.
The difference is that Scotland was in a relatively stronger financial position than the UK to the tune of £4.4bn, or £824 per person.
With independence we could have chosen to invest an extra £1.4bn in capital projects, creating jobs and growth, to save £1.4bn in an oil fund for the future and to borrow £1.4bn less…all of that – and we would still have enough left over to undo the bedroom tax.
The numbers show that Scotland’s relatively stronger fiscal position last year was not a one off event. Over the past five years, Scotland has been in a relatively stronger fiscal position than the UK as a whole to the tune of £12.6 billion.
And when we look further back, between 1980 and 2011, Scotland has run an average annual surplus equivalent to 0.2% of GDP, whilst the UK has run an average deficit of 3.2% of GDP.
That’s the true picture Scotland’s books present. This country pays her way and has strong foundations for Independence.
Conference, you will have noticed we have had a bit of a rammy over oil in recent days. A rammy over oil is nothing new.
The NO campaign have accused me of saying one thing in private about oil and a different thing in public.
That would never do would it.
Back in the 1970s the Westminster Government claimed in public that oil was volatile and running out. But in private, the UK Government said something very different. The Government’s Chief Economist at the time in Scotland, Gavin McCrone assessed the impact of oil.
His verdict was this:
“All that is wrong now with the SNP estimate [of government oil revenues] is that it is far too low”
Well this Government will take no lessons from the Unionists. We say the same thing in private as we say in public. We say oil production is rising. Investment is rising, now worth around £100 billion.
Oil prices are higher than the Office for Budget Responsibility predicts.
Scotland is estimated to be the largest producer of hydrocarbons in the EU. The industry has the potential to generate between £41 and £57 billion in tax revenue between 2012-13 and 2017-18.
We are on the cusp of another great boom in the oil industry and our opponents are at it again; claiming it is all going to run out; pretending that oil is a problem instead of the opportunity that it truly represents.
Conference our job is to make sure Scots are not duped out of our oil opportunity for a second time in our history.
Our opportunity is not just about oil.
We have some 25% of Europe’s potential offshore wind and tidal energy, a tenth of Europe’s wave power potential, and an estimated 50% of carbon capture and storage reserves. We remain one of the richest energy nations in Europe.
This represents a huge resource which if harnessed correctly will make an important contribution to the Scottish economy for decades to come. And as oil and gas mature, so the new technologies of renewable energy and carbon capture will be reaching their peak.
There can be no doubt, that in the event of a Yes vote in 2014 Scotland will be becoming independent from a position of relative economic strength. Having the ability to properly combine the assets of our people with our natural assets in the pursuit of a more prosperous Scotland can only enhance our potential.
For beyond any one sector or industry, we have the strength of the people of Scotland and of our nation itself. We have a strong intellectual base with many of our Universities regularly appearing in assessments of the Top 100 global places of learning.
Last year a record 87% of school leavers sustained their place in education, employment or training. And youth unemployment is currently falling at its fastest rate since 1992.
Our opponents only talk about what we “can’t do” never what we “can do”. Conference, our children don’t have time any longer for Scotland’s defeatists. We need to take control of our future.
We have to explain to Scotland what is possible.
That is why we invited a group of world leading economists, some of them Nobel laureate winners, to analyse Scotland’s economy and finances.
Their 222 page vision for the macroeconomic framework of Scotland will
– build investor and business confidence,
– enable Scotland to develop sustainable fiscal policies,
– and sustain an economy that enables Scotland to develop our own unique policies.
It’s a robust structure that provides foundations for prosperity, fairness and economic opportunity.
The work of the commission considers all the options that are of significance in designing the macroeconomic framework for an independent Scotland.
They make the argument that retaining Sterling would make sense for Scotland and the rest of the UK. It would give price stability and enable a future independent Government to use the full fiscal and economic flexibility that comes with sovereignty to change and adapt to new economic circumstances, promote growth and create jobs.
A Sterling zone would provide a consistent and transparent framework to manage the transition process, and ensures that the rest of the UK would also retain an integrated market with a key trading partner.
And Conference, far from all the rhetoric we know the UK Government accepts that it is possible.
And I’m pretty sure conference that our £45bn worth of exports to the UK will bring them to the table the very moment the Yes ballots are counted.
The Fiscal Commission also recommended an independent fiscal body to consider fiscal discipline.
Scotland knows the hardship suffered when a country lets its finances get out of control.
Westminster took us into the second largest structural budget deficit in the EU despite a decade of continuous economic growth. We know what this exposure led to when the recession hit. We see the impact on intergenerational poverty. We have nothing to be thankful to Alistair Darling for his stewardship of the UK economy.
The Fiscal Commission also encouraged us to set up an oil fund.
Norway has had their oil for forty years—the same amount of time Westminster has squandered ours. They formed an oil fund 17 years ago which is now worth £450 billion.
We’ll save on the upside and deliver for Scotland’s pensioners and future generations.
As the Commission makes clear, as a nation our economic fundamentals are sound – but, Conference and Scotland, we could do better.
The sad truth remains: while many of our economic characteristics are as strong, if not better than the UK as a whole, we lag behind many other countries of a comparable size both on key economic and social indicators.
The Fiscal Commission gave us a substantial and thoughtful route map on creating a sound economic framework for an Independent Scotland. I thank them for this work and I have some advice for the NO campaign. Read the report – you’ll learn something about how to run sustainable public finances.
Conference, the Fiscal Commission also told us something else. We live in a society of growing inequality.
In terms of GDP per head, the UK is currently ranked 17th in the OECD and 28th in the UN’s Human Development Index – between the Czech Republic and Greece.
Too many of our people live in poverty, part of a UK economic structure and society which is one of the most unequal in the advanced economies.
Despite growth in recent decades, inequalities have grown rather than fallen, and the gap between the rich and poor has become greater. Those inequalities will only rise as a result of the forthcoming welfare reforms.
Indeed, the OECD in 2011 showed that since 1975 income inequality among working age people increased more quickly in the UK than in any other OECD country
Regional variations within the UK have also widened. Policy decisions have been taken at the UK level with little consideration for their impact in different parts of the UK.
Every person struggling with the impact of poverty is a member of our society unable to play their full part in the economic life of our country. All this does is hinder our efforts to become a stronger and more successful nation where all have the opportunity to flourish.
So our pledge to the people of Scotland is this. The point of Scotland is becoming independent is to give us the power to boost the economy and tackle inequality. That is what people can expect with Independence.
With independence – Scotland would have control over new economic levers that can be used to deliver economic growth, boost resilience, achieve greater fairness and opportunity, promote sustainability and boost long term competitiveness.
We can fully unlock Scotland’s job creation potential and improve the prospects of the people in Scotland.
At the heart therefore of our case for independence is the argument for greater economic powers for Scotland to be able to grow our economy more quickly and build a more cohesive, sustainable and inclusive society.
Scotland has proven its competence in managing the powers we currently hold. Independence will allow us to build upon this platform of trust and competence into areas of responsibility available to other comparable nations.
With the momentous date in the diary, let’s get ready for a day when policies are no longer engineered in London and endured in Scotland.
A day when we are no longer held back.
Independence offers the people of Scotland the chance to make our country a wealthier, fairer, more sustainable place in which we can all to live.
That is the bright future that lies ahead for our country.